ASIC free to pursue Storm founders

A request from Storm Financial founders Emmanuel and Julie Cassimatis has been dismissed by the Federal Court, freeing the Australian Securities and Investments Commission (ASIC) to pursue civil penalty proceedings against the pair.

Mr and Ms Cassimatis had sought a summary dismissal of ASIC’s case against them, with the regulator seeking to ban the pair from the financial services industry and disqualify them from managing companies, as well as the payment of pecuniary penalties.

ASIC said it is alleging the executive directors breached their directors’ duties and will now be asking the court to implement a timetable for these proceedings to be progressed to trial.

“Since Storm’s collapse ASIC has been seeking compensation for investors as well as pursuing regulatory action against those companies and individuals intrinsically involved in implementing the Storm model,” ASIC Deputy Chairman Peter Kell said in a statement.

In May 2013 ASIC secured $1.1 million in compensation on behalf of two former Storm investors, Barry and Deanna Doyle.

ASIC also pointed to its appeal against a recent decision of the Federal Court to approve the settlement between former Storm Financial clients and Macquarie Bank Limited, relating to the fairness of the distribution of payment.

ASIC also pointed to an agreement last year with CBA for the bank to provide up to $136 million in compensation for Storm investors who borrowed with the bank.

ASIC said the Cassimatis matter will return to court for a directions hearing on 11 July 2013, at which time the court will order a timetable to progress the proceedings to trial and also hear argument on the question of costs arising from the court’s decision to dismiss the defendants’ application.